The Retirement Spending ‘Smile’: Estimating Changes in Retirement Expenditures
Aug 20, 2015
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By Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC
Conventional wisdom may be overestimating how much clients need in retirement. Recent research shows that the growth rate in retiree spending looks like a “smile”—expenses grow most rapidly at the beginning and end of retirement, with an offsetting dip in the middle. Bottom line, clients may need 20% less in savings than originally thought.